IBM Point of view February 2008

IBM’s Vision For The New Enterprise Data CenterA breakthrough approach for efficient IT service delivery

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Table of contents

3Introduction

4Market forces are driving change

6Transforming to a New Enterprise Data Center model

10The New Enterprise Data Center: the journey evolves

13IBM’s commitment to evolving IT service delivery

14How to start on your own journey

14Conclusion

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You can’t make the world move slower. Or change where markets are headed. Or hold

back new technologies while focusing on day-to-day IT operational issues. But there

is something you can do, right now. To react faster. To be more efficient. To provide

innovation for your business and your customers. A new vision. A better approach.

The new enterprise data center—starts now.

The fact is, not all of today’s IT infrastructures were built to support the explosive growth

in compute capacity and information. Many data centers have become highly distributed

and somewhat fragmented. As a result—they are limited in their ability to change quickly

and support the integration of new types of technologies or to easily scale to power the

business as needed.

So how do you find the time and resources to drive the innovation required to keep your

company competitive in a rapidly changing marketplace? How can you react to business

needs faster?

Since today’s distributed approach to the enterprise data center is challenged to keep up

in a fast-paced business environment, a new centralized IT approach is needed. We must

rethink IT service delivery to help move beyond today’s operational challenges to a new

data center model that is more efficient, service oriented and responsive to business needs.

With new economics. Rapid service delivery. And one that can provide tighter alignment

with business goals.

IBM’s vision for the new enterprise data center is an evolutionary model that helps reset

the economics of IT and can dramatically improve operational efficiency. It also can help

reduce and control rising costs and improve provisioning speed and data center security

and resiliency—at any scale. It will allow you to be highly responsive to any user need.

And it aligns technology and business—giving you the freedom and the tools you need to

innovate—and stay ahead of the competition.

Through our experience with thousands of client engagements, we have developed

an architected approach based on best practices and proven implementation patterns

and blueprints. And our own data center transformation provides first-hand proof that

embracing this new approach simply makes good business sense.

Introduction

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Right now, technology leaders are challenged to manage sprawling, complex

distributed infrastructures and an ever growing tidal wave of data, while remaining

highly responsive to business demands. And, they must evaluate and decide

when and how to adopt a multitude of innovations that will keep their companies

competitive.

Daily operational challenges

IT professionals spend much of the day fixing problems—keeping them from

applying time and resources to development activities that could truly drive business

innovation. In fact, many say they spend too much time mired down in operations

and precious little time helping the business grow. These operational issues include:

• Costs and service delivery: Time is money—and most IT departments are forced to

stretch both. There is no question that the daily expense of managing operations

is increasing, as is the cost and availability of skilled labor. In fact, IT system

administration costs have grown four fold and power and cooling costs have risen

eight fold since 1996 alone.1 And in today’s data center, data volumes and network

bandwidth consumed are doubling every 18 months with devices accessing data

over networks doubling every 2.5 years.2

• Business resiliency and security: As enterprises expand globally, organizations are

requiring that IT groups strengthen the security measures they put in place to

protect critical information. For good reason. Enterprise risk management is now

being integrated into corporate ratings delivered by organizations such as Fitch,

Moody’s, and Standard & Poor’s. At the same time, companies are demanding

that users have real-time access to this information, putting extra—and often

conflicting—pressure on the enterprise to be both secure and resilient in the

expanding IT environment.

• Energy requirements: As IT grows, enterprises require greater power and cooling

capacities. In fact, energy costs related to server sprawl alone may rise from less

than 10 percent to 30 percent of IT budgets in the coming years.3 These trends are

forcing technology organizations to become more energy efficient—to control costs

while developing a flexible foundation from which to scale.

Market forces are driving change

The bottom line? Enterprises report that IT operational overhead is reaching up to 70 percent of the overall IT budget. And that number is growing—leaving precious few resources for new initiatives.4

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Harnessing new technologies to support the business

If you’re spending most of your time mired in day-to-day operations, it’s difficult to

evaluate and leverage new technologies available that could streamline your IT

operations and help keep your company competitive and profitable. Yet the rate of

technology adoption around us is moving at breakneck speed, and much of it is

disrupting the infrastructure status quo. Consider some examples: In 2007, there

were 3 billion mobile subscribers worldwide—and that number is estimated to grow

by 2010.5 Between 2003 and 2006 stock market data volumes rose by 1750 percent

in financial services markets alone.6 And by 2010, it is estimated medical imaging will

consume 30 percent of the world’s data storage.7

Increasing speed and availability of network bandwidth is creating new opportunities

to integrate services across the web and re-centralize distributed IT resources.

Access to trusted information and real-time data and analytics will soon become

basic expectations. Driven by the expanding processing power of multi-core and

specialty processor-based systems, supercomputing power will be available to the

masses. And it will require systems, data, applications and networks that are always

available, secure and resilient.

Further, the proliferation of data sources, RFID and mobile devices, unified

communications, SOA, Web 2.0 and technologies like mashups and XML create

opportunities for new types of business solutions. In fact, the advancements in

technology that are driving change can be seen in the new emerging types of data

centers, such as Internet and Web 2.0, which are broadening the available options

for connecting, securing and managing business processes.

Ultimately, all of these new innovations need to play an important role in the new

enterprise data center.

“ More than 70 percent of the world’s Global 1000 organizations will have to modify their data center facilities significantly during the next five years.” 8

— Gartner, September 2007

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IBM’s vision for the new enterprise data center provides for a new approach to IT

service delivery. Through it, you can leverage today’s best practices and technology

to better manage costs, improve operational performance and resiliency and quickly

respond to business needs. Its goal is to deliver:

New economics: The new enterprise data center helps you transcend traditional

operational issues to achieve new levels of efficiency, flexibility and responsiveness.

Through virtualization you can break the lock between your IT resources and

business services—freeing you to exploit highly optimized systems and networks to

improve efficiency and reduce overall costs.

Rapid service deployment: The ability to deliver quality service is critical to businesses

of all sizes. Maintaining a positive customer experience—and ensuring cost

efficiency and a fast ROI—relies on your ability see and manage the business—while

leveraging automation to drive efficiency and operational agility. Therefore, service

management is a key element in the new enterprise data center approach.

Business alignment: A highly efficient and shared infrastructure can allow you to

respond instantaneously to new business needs. It creates opportunities to make

sound decisions based on information obtained in real time, and it provides the

tools you need to free up resources from more traditional operational demands. With

a new enterprise data center, you can focus on delivering IT as a set of services

aligned to the business—freeing up time to spend on IT driven business innovation.

Transforming to a New Enterprise Data Center model

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Enabling The New Enterprise Data Center—a holistic, integrated approach

What makes IBM’s approach for efficient IT service delivery so unique? As

businesses move toward a recentralization of the data center environment, a holistic

integrated approach needs to be considered. IBM captures an end-to-end view of

the IT data center and its key components. Although we understand that incremental

improvements to each element of the new enterprise data center can improve overall

operations, we take into account that modifications to one component may strain the

performance of another.

For example, upgrading the enterprise information architecture to provide integrated

and trusted information to users will likely require changes to security and business

resiliency approaches. And, creating highly virtualized resources are most effective

along with a stronger, more integrated service management approach.

As such, the strategy for the new enterprise data center needs to be holistic and

integrate the key elements of:

• Highly virtualized resources that are flexible to adjust to changing business needs

to allow for more responsive provisioning and help deliver efficient resource

utilization. Virtualization removes the bind between applications and data and

underlying physical resources—granting IT organizations more flexibility and

freedom in deployment options and the ability to exploit highly optimized systems.

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• Business-driven service management, in which a complex and difficult-to-manage

environment is transformed for improved transparency—and cost-efficient,

easier management. This transformation involves raising management tasks

from the simple monitoring of individual resources to the orchestration of the

entire environment to be more responsive and efficient. Once transformed, the

environment can be fully aligned with business needs and controls to ensure that

customer priorities are met, business controls are maintained and availability and

performance is maximized across the entire enterprise.

• Security and business resilience approaches and best practices that become

increasingly important with the consolidation of data centers and recentralization

of systems and data while providing secure, open access across and beyond

organizational boundaries.

• Efficient, green and optimized infrastructures and facilities, which balance and adjust

the workloads across a virtualized infrastructure and align the power and cooling

consumption with business processing requirements across all IT and data

center facilities. The result is balanced energy demands to help avoid high peak

energy use and the associated higher energy billing rates and meet SLAs based

on business priorities. Through the introduction of an optimized infrastructure,

the number of systems and networks in the data center can be reduced, cost

efficiency improved and energy efficiency enhanced.

• Enterprise Information Architecture. Data that was typically contained in disconnected,

heterogeneous sources and content silos is virtualized through a flexible enterprise

information architecture. Therefore, IT can deliver trusted information to people,

processes and applications to truly optimize the business decision making and

performance.

IBM was named ComputerWorld’s No. 1 Green IT Vendor in 2008. According to ComputerWorld, “Green computing promises an enormous win for IT: a chance to save money—and the environment. Many companies are trying to go greener, but a few truly stand out.” 9

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Many companies have begun to address some of these challenges head on. In fact,

between 30 to 50 percent of large enterprises have consolidated or are consolidating

today, and most are doing some level of virtualization.10 Those that have really

advanced these efforts are seeing significant returns or savings.

Some of our clients—and IBM’s own data center transformation—have shown the

ability to:

• Triple asset utilization11

• Provision new resources in minutes12

• Reduce heat by up to 60 percent13

• Reduce floor space by as much as 80 percent14

• Reduce disaster recovery time by 85 percent15

Is your organization seeing these types of benefits? If not, the possibilities do

exist. In fact, today IBM is working with clients who are seeing these kinds of

improvements. And, their efforts are not only impacting the bottom line—they

are freeing up the technology resources and human capital to work on new

innovation projects.

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The New Enterprise Data Center: the journey evolves

Scaling back—an IT service transformation programBy consolidating, optimizing and virtualizing its servers and storage, the University

of Pittsburgh Medical Center reduced its physical systems inventory by up to

60 percent. Plus, it consolidated 40 storage subsystems down to two storage area

networks (SANS). Because it reduced energy, complexity and labor, the organization

has been able to trim costs by nearly $40 million.

Most likely, many companies have already started to implement a few key

components on their way to a new enterprise data center model. Some have projects

in place to consolidate and virtualize servers, data silos and storage. Others are

exploring new ways to optimize information availability. In reality, though, few data

centers today begin with a clean slate.

To truly maximize the benefits of this new model, you must start planning your

transformation—or journey—and that begins with consideration for where you and

your priorities are today. You don’t build a house without a blueprint. Why would it be

any different with your IT infrastructure?

IBM has identified three stages of adoption along this journey: Simplified, Shared

and Dynamic. Each offers a range of benefits that can be achieved as you progress

along the continuum toward deploying a new enterprise data center.

Simplified: This stage involves consolidating data centers and the physical

infrastructure, such as storage, servers, networks and information. By breaking down

silos of similar resources and deploying end-to-end systems and network tools,

organizations begin to simplify the management of the data center, which becomes

more resilient and secure. Service management takes on an increasing important

role in automating the newly integrated IT and business services. Most enterprises

begin their journey here.

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Expanding performanceBy leveraging IBM storage virtualization technology, Hong Kong Broadband Network

was able to pool resources across IBM and non-IBM storage servers. In doing

so, the organization created faster testing environments and achieved far better

utilization and greater flexibility. And, it drove performance improvements over

50 percent.

Shared: This stage is about creating a shared IT infrastructure that can scale rapidly

and efficiently without being limited by facilities or energy. Here, organizations

can begin to gain increased efficiency and flexibility by creating highly virtualized

resource pools for server platforms, storage systems, networks, information and

applications. This provides efficiencies of scale, because each pool is managed as

a single resource. With large pooled resources, utilization can rise, energy efficiency

can improve, service delivery is more flexible and the entire environment can be

better aligned with the business.

In addition, this shared environment allows for quick and easy provisioning of new

IT resources on an as needed basis, regardless if you’re responding to seasonal

growth in sales or the launch of a new application or business service. This dramatic

increase in flexibility and responsiveness is enabled by policy-based service

management, which allows these pooled assets to be easily provisioned and

cohesively managed through a service catalog.

Finally, a shared infrastructure permits movement, control and balance of workload

and data. Energy management tools, which can tie into data center power and

cooling systems, help further improve energy efficiency. Hence, your data center

becomes “green by design”—not just in how it uses power—but in the ability to

greatly increase capacity and scale to any level, as required.

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IBM puts IT tools in the hands of its researchersTo support its research team, the IBM IT group developed a Research Compute

Cloud (RCC), to reduce the time and management overhead required to support

ever-changing IT service needs. As a highly virtualized shared infrastructure with

automated service management, the RCC provides researchers the ability to obtain

common application services, such as a new database, in minutes instead of days

or weeks. They also have calculated a 95 percent reduction in power and footprint

with this new approach. Through this new venture the IBM IT staff has improved the

research team’s productivity—and satisfaction with IT.

Dynamic: At this stage, you can achieve true flexibility and freedom. You’ve removed

the physical tie between services delivered and the underlying infrastructure, and

you now can bring new services online rapidly, without concern over where they

are going to execute. For example, a user can simply request a new service—and

a level of service quality—without understanding how it is built and delivered.

Essentially, the complexities of the underlying IT infrastructure are now ‘hidden’ as

well as automated and optimized. And given that IT services are offered in terms

of service levels, rather than specific technologies, you have the ability to modify

resources to be as cost effective as possible without disrupting business. Plus, you

gain efficiency through standardization and the automation of policies and processes

through service management.

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IBM offers an approach that is built on real-world experience, embraces open

standards and is supported by an ecosystem of technology partners.

IBM continues to invest in open communities to speed the process and acceptance

of new types of technologies. Our commitment is based on real-world experience

and a proven track record of taming disruptive innovations such as using the internet

for e-business, leveraging open source to produce enterprise Linux, and now

harnessing the efficiencies of cloud computing for the new enterprise data center.

Our focus is as much on process as it is technology transformation. With thousands

of highly successful customer transformation engagements over the last few years,

we’ve been able to identify best practices for IT optimization and transformation.

Our vast experience has enabled us to develop a proven and disciplined strategy,

design and implementation approach incorporating consolidation, virtualization,

flexible IT infrastructure and ‘IT as a set of services’ patterns to simplify your

transformation, regardless of your starting point. And as our experience grows,

we continually enhance the blueprints that are needed to move to a truly efficient,

dynamic service delivery environment.

Our experience is at all levels—from technology, consulting and strategy services

through business processes—to collaborate with our clients and help them gain

value at every stage.

“ For IT executives looking for a single, one-stop shop for assistance in building next-generation data centers—and for a company with a long-term, comprehensive industry vision complemented by associated products and services—IBM should be first-and-foremost on any new enterprise data center migration short-list.” 16

—Clabby Analytics, Jan 2008

IBM’s own data center transformationIBM has been on this journey toward a new enterprise data center for years. We

began in the simplified stage, and through various levels of consolidation and

centralization, we have seen tremendous benefits, including savings up to $1.5

billion reduction in operational costs per year. We marched right into the shared

phase with “Project Big Green,” which is projected to double our computing capacity

by 2010 without increasing power consumption or impact. And as we move toward

a fully dynamic IT model, we anticipate continued improvements of service delivery,

real-time integration of data analytics and information and the true delivery of IT as a

business service.

IBM’s commitment to evolving IT service delivery

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Transformation to a new enterprise data center is an evolutionary one. Therefore,

getting started requires you to identify your starting point on the continuum—aligning

immediate needs with your long-term vision. For example, some organizations may

have critical operational issues that need to be addressed today. Others may be

improving availability and security within the infrastructure. With years of proven

experience and our established reference architecture, IBM helps you define your

starting point, address immediate needs and develop a detailed roadmap that offers

rewards at every milestone along the way.

How to start on your own journey

Organizations in every industry are exploiting advanced technologies to gain

competitive advantage. And, infrastructure complexity and rising energy costs

are driving higher operational expenses for organizations. IBM’s vision for the new

enterprise data center offers an evolutionary new model for efficient IT delivery—

giving you the tools to overcome the minutia of daily operations to drive real business

innovation. And, IBM can provide the roadmap, tools and support to help you

get there.

Conclusion

© Copyright IBM Corporation 2008

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1 Virtualization 2.0: The Next Phase in Customer Adoption. Doc. 204904 DC, Dec. 2006

2 Jan. 2008, IDC

3 The data center power and cooling challenge. Gartner, Nov. 2007

4 Virtualization 2.0: The Next Phase in Customer Adoption. Doc. 204904 DC, Dec. 2006

5 Infonetics Research, Radio Access Network Equipment and Subscribers report, October 2007

6 TABB Group, Trading at Light Speed: Analyzing Low Latency Market Data Infrastructure, March 2007

7 IBM Global Technology Outlook, 2005

8 G00151687 Gartner, Inc. Sept. 25, 2007

9 February 15, 2008 Computerworld (www.http://www.computerworld.com/ action/article.do?command= viewArticleBasic&articleId=312485)

10 Virtualization: Killer platform for the next generation data center. Merrill-Lynch, Oct. 2007

11 UPMC

12 IBM Research Compute Cloud (RCC)

13 PG&E

14 Nationwide

15 BMO Financial Group

16 Clabby Analytics, January 2008

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For more informationTo find out how IBM can help you transform your data center,

contact your IBM representative or visit:

ibm.com/datacenter